Being dropped by an auto insurance company is an unpleasant experience, to say the least. You will not be able to drive until you find new coverage; and when do you acquire coverage, it will most likely be for a much higher rate than what you were paying previously. Simply, being dropped amounts to one massive headache. Let’s explore the reasons why a car insurance company would drop you and what you can do to avoid this calamity.
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Lying On An Insurance Application Form
Auto insurance companies don’t take kindly to when a potential policyholder stretches the truth. They demand complete honesty when an applicant fills out the form; if the insurer discovers later that the policyholder embellished with the truth, the policy could be voided and the person could be dropped. It is unwise to lie to try and save some cash on premiums. If the insurance company catches you, you could end up paying a lot more in the long run.
Fraudulent Claims
A fraudulent claim is illegal and will automatically result in a policyholder being dropped. Committing insurance fraud is a very serious infraction and it could amount to jail time. This includes “padding”, or over estimating the amount of damages in a car accident in order to get more money from an insurer and faking injuries.
Having Too Many Accidents
A couple of at-fault accidents in a short time period can result in the policyholder being dropped. The car insurance company may view you as too great of a risk and will drop you in order to cut their losses. The exact number of accidents it takes in what specific time frame depends on the insurance company, the amount of the claims, and your personal driving history.
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Having Too Many Traffic Tickets
Most of us are aware that a speeding ticket can and often does lead to higher insurance premiums. An excess of tickets can actually result in a policyholder being dropped, for the same reasons why a car insurance company will drop someone who has been in a number of at-fault collisions – the policyholder is too great of a risk to underwrite.
Missing Premium Payments
Failure to pay a premium on time can result in lapsed coverage and a policyholder being dropped. Auto insurance companies expect premium payments on time; failure to do so can result in a policyholder getting dropped.
Getting A DUI
A number of auto insurance companies will immediately drop a policyholder who has received a driving while intoxicated violation. Auto insurance companies don’t take these violations lightly. Drive while drunk and you could lose your car insurance coverage.
While it seems like car insurance companies may be overzealous in dropping policyholders, generally every driver simply needs to follow a few simple rules in order to maintain coverage. Be truthful, drive carefully, make your premium payments and don’t drink and drive and you will have nothing to worry about. If you are dropped, do realize that you still have options. You can still find auto insurance coverage. Start by entering your zip code in the box below and within minutes you could have an auto insurance quotes.